A long time ago in a strange country called Middle-Earth lived a hobbit called Bilbo Bagshot. Hobbits are like little magical fairies and live in burrows. One day a Wizard called Gandalf arrived on Bilbo's doorstep with 13 Dwarves and asked Bilbo if he would like to go on an adventure to recover a hoard of treasure from the Dragon Smaug who had stolen it from the Dwarves hundreds of years earlier.

Gandalf led them through the forest to the castle of the Elf-King, Elrond where they stayed for a few days before continuing on their journey. Their route took them over some mountains. On the way, Gandalf became separated from the party and, despite all their efforts, no-one could find him. Bilbo and the Dwarves travelled on but, in one of the mountain passes, they were ambushed by a party of Goblins who captured them all except for Bilbo who hid behind a rock. The Goblins took their prisoners into the caves where they lived to be brought before the Goblin King. Crawling out from behind his rock, Bilbo followed them in. Unfortunately, he got lost in the caves and bumped into a strange frog-like creature called Gollum. Gollum was very friendly towards Bilbo and offered to show him the way out of the caves but Bilbo said that he couldn't leave without his friends. Gollum then gave Bilbo a magic ring which made him invisible when he wore it and showed Bilbo the cell where the Dwarves and Gandalf were being held.

Bilbo, being invisible, managed to sneak in and unlock the door of the cell and let everyone out. To get past the Goblin guards, they all climbed into a huge barrel which Bilbo rolled into an underground river that led out of the caves. Unfortunately, as the barrel emerged from the caves, they were all caught in a web which had been spun across the river by Shelob, a giant spider. Luckily, Bilbo put the ring on to become invisible and managed to cut the web with his sword and they all sailed on down the river through the forest.

As they drifted along the river, they met Gandalf on the bank. Gandalf told them that he had been lost but luckily he had met a friendly bear called Bjorn who gave him food. Reunited again, the party continued along the river which led to the mountain where Smaug the Dragon lived. When they arrived at the mountain, they couldn't find a way into the caves where Smaug lived until they met a talking blackbird which showed them a secret map hidden under a stone. This map told them where the entrance to the caves was and they all climbed the mountain up to the entrance. Unfortunately, on the way, Gandalf got lost again and no-one could find him.

When they reached the cave, one of the Dwarves, Thorin, announced that he was really King of all the Dwarves and then asked Bilbo to put on the magic ring and go into the caves to kill the dragon so that they could get the treasure. Bilbo put on his ring and crept into the cave and found Smaug sitting on a huge pile of gold. The dragon realised that Bilbo was there but couldn't see him and started talking to him. After talking to Smaug for a while, Bilbo discovered that he was always being attacked by dwarves who wanted to steal his treasure and he ended up feeling very sorry for him.

He came back out of the caves and told Thorin that the Dragon wasn't there and that there was no treasure. Thorin was very angry at this but, before he could do anything, one of the other dwarves spotted an army of Goblins coming from the mountains to recapture the dwarves. The dwarves were outnumbered and it looked as though they would all be killed when Smaug the dragon flew out of his cave and attacked the Goblin army, killing them all and saving the dwarves.

All the dwarves were very grateful to Smaug and Thorin apologised to him for all the attacks by his people. He promised to pass a law which forbade all Dwarves from attacking Smaug or any members of his family. In gratitude, Smaug gave the Dwarves most of his treasures and gave Bilbo a coat made of silver. On their way back home, they found Gandalf who had wandered on the mountain for days before being rescued by a giant Eagle who lived on the mountain's peak.

Bilbo returned to his home and for years later he amused the hobbit children with his stories and his amazing silver coat